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Racism, rights ’could hurt China FTA’


Racism, rights ’could hurt China FTA’

May 18, 2005

Racism and left wing politicians focusing on human rights could threaten a proposed free trade deal between Australia and China, a new report says.

In an article for the Committee for Economic Development of Australia (CEDA), economists Jia Qingguo and Zhong Tingting said there were still differences between the two countries that may impede work on a free trade agreement (FTA).

The pair said the links between Australia and the United States, and the possible tensions between America and China, could impede development of an FTA.

But they said domestic political issues inside Australia could also hold back an important economic development.

"Certain interest groups are likely to make use of the differences to promote their interests through pressuring the Australian government to take heavy-handed approaches on issues such as human rights, labour rights, Tibet, Taiwan and the environment," they said.

"Some Australian politicians are also likely to take advantage of the situation to promote their personal ambitions through fanning anti-China sentiments in Australia.

"Despite the narrowing of the differences, the gaps remain significant enough to generate misunderstandings and suspicions."

The two countries have started formal negotiations on an Australia-Sino FTA which an economic study estimated would boost the Australian economy by up to $23 billion by 2015.

There are concerns within Australia that such an agreement will wipe out the local manufacturing sector, while China has major reservations about its impact on the country’s farmers.

The CEDA report examines a series of issues surrounding the FTA and how they may be surmounted.

HSBC chief economist John Edwards said Australian manufacturing firms had yet to benefit from the growth of China because they did not have a history of internationalisation.

But the story would be different for the health, finance and real estate areas.

"Australian firms that have internationalised are often in real estate development finance and health technology - industries in which for one reason or another Australia has a specific expertise, and the home market has been outgrown," he said.

"As Chinese households evolve more complicated balance sheets and the Chinese service sector expands, Australian expertise will become more relevant."

An emerging concern is the abuse of intellectual property rights within China. The US is considering World Trade Organisation action against China over pirating issues.

Director general of IP Australia Ian Heath said companies had to be aware of intellectual property abuses within China.

He said the 2008 Beijing Olympics could help in raising pirating issues.

"Australian companies exporting products and services to China need to be aware of the enforcement arrangements in place and take additional precautionary measures to protect their intellectual property," he said.

 source: Sydney Morning Herald